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Published on March 8th, 2019 | by John Kane

4

Planning Your First Binary Options Trade

The most important consideration is to be prepared. Never trade without a plan. This is rule number one. A trading plan can only be developed after learning, study and practice has taken place.

Trade Checklist

The aspiring trader should have a checklist prepared in advance of making his / her first trade. Here are some helpful questions that you should be asking yourself before placing a trade.

  • Did I have a well-thought-out trading plan?
  • Will this trade I am contemplating be in harmony with my trading plan?
  • Have I made simulated trades like this already?
  • Did they result in a profit after a significant number of trials?
  • Have I predefined my potential loss on the trade I am contemplating?
  • Am I willing to accept this loss?
  • Am I aware that any given trade can be a loser?

Should also ask yourself if you have a signal source. If you aren’t a talented trader, you should be using a binary options software or signal service to help you with your trade opportunities.

Checklist Analysis

Consideration of the following points may prove useful before embarking on any trading endeavor involving binary options: This type of trading is best suited to people that like taking and can afford exposure to risk. Always remember that the buyer of a binary option can lose the total amount at risk (minus the “out-of-the-money refund offered by some brokers).

Risk Tolerance

If risk-taking is not in part of your nature, or if particular adverse circumstances have recently affecting you, consider taking a break from binary options trading. The market will be there when and if you are ready and prepared.

Trading Strategy

Run away from any binary options trading strategies that promise guaranteed profits. They don’t exist. Surprises happen even for the best trading systems and for the best traders. Avoid tips and gossip about the instruments you are thinking of trading. The Internet provides many sites offering tips on binary options. It can become very easy to get emotionally involved with these sources of opinion. It is always better to rely on your own, well-proven methods.
Always be aware that losses occur. These losses can occur in a matter of minutes and can cause adverse emotional responses in some traders.

Understanding Risk Reward

Remain aware of the balance between risk and reward. Yes, it is true that a bigger bet size can result in a bigger reward. But the opposite is also true: a bigger bet size can result in a bigger loss. Carefully plan out all trades. This includes but is not limited to the amount of capital at risk and the frequency of entering into trades.

Financial markets are bigger than any one individual. Surprises can and often do occur. These surprises can propel you to profit or contribute to losses, despite all the planning and knowledge any trader employs. Successful traders think long term. They realize that experience is something that is accumulated with time.

For further reading, see our most recent binary options income report, to see what’s currently working in 2019. New traders, feel free to see our binary options 101 trading plan.

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About the Author

I am a full time binary options trader. I was able to leave my job in the last 5 years and dedicate myself to trading fully. I never thought my hobby and passion would make a living for me but I am grateful every day that it has. My main goal now is to communicate with the binary trading community, contribute to different websites and learn from other traders.

Disclaimer: Binary Today would like to remind you that the content contained in this website is not necessarily real-time nor accurate. Past performance does not guarantee future performance, the above is not indicative and is purely for educational purposes only. Relying on the above for investment, trading or betting in binary options or Forex is not advised unless done so with virtual money only.

Binary Today or anyone involved with Binary Today will not accept any liability for loss or damage as a result of reliance on the information including reviews, recommendations, charts, software, income reports and signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


4 Responses to Planning Your First Binary Options Trade

  1. Femi says:

    Hello John. I am happy to visits your website and to have read your reviews on binary trading softwares and strategies. your reviews are honest and i must say a big thank you. Keep the good job up.

  2. Jon says:

    Hi John,

    Appreciate you posting this article!

    Considering how long you’ve been successful trading binary options, is there anything in particular you believe has contributed most to your long term success?

    I’ve traded for several years now, but haven’t come close to having the kind of success you have.

    Thanks much!

    • John Kane says:

      Hi Jon, definitely testing and being aware of my wins / losses so I can adjust when I trade, the expiry times I trade and the pairs I trade.

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